Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mary is the manager of the Alpha company in the grocery industry. The major role of Alpha company is working as a grocery distributor though

Mary is the manager of the Alpha company in the grocery industry. The major role of Alpha company is working as a grocery distributor though the company also produces some products. There are 4 products W, X, Y, and Z caused a lot of troubles for Mary in the past several years since the inventory and sales records were not available. From 2020 with the investment of IT and supply chain infrastructure, Mary can continuously monitor the sales and inventory information of these 4 products. It was the end of 2020. Mary had collected all 2020 weekly sales data and order history for these 4 products shown in the attached spreadsheet. This file also includes the historical order information for every weeks order in 2020. Mary wanted to use scientific ways to forecast demand and manage inventory for these 4 products. She decided to assign a project to Jason who has worked in the company for several years and just got his degree last year. Consider yourself as Jason to figure out what to do from this point forward.

Product W

Product X

Product Y

Product Z

$220

$50

$5

$3

a) Jason decided to use ABC rule to classify these 4 products. A category product(s) will have the target service level of 95%. B product(s) will have the target service level 90% and C products(s) will have the target service level 85%. After setting the appropriate service level, Jason will use the service level information to calculate the safety stock level for each product.a) How should Jason classify the ABC products? (10 points)

b) After classifying these 4 products, Jason wanted to use the ROP model forinventory/ordering management. He believed he would get an accurate demand forecasting for the first week of 2021. But based on the historical data. The attached spreadsheet document includes the order information for 2020. The company places the order of all products on each Wednesday. Jason found the lead time of orders has variations for all these 4 products. Which ROP model should Jason implement?

c) What are the reorder points for each of these 4 products for the first week of 2021?

Sales infromation of each product of 2020
Week 2020 Product W Product X Product Y Product Z
1 34 54 253 203
2 34 51 253 203
3 35 55 250 208
4 34 55 250 201
5 36 54 248 202
6 39 57 258 210
7 36 56 248 202
8 40 56 251 205
9 41 53 249 207
10 44 56 249 205
11 43 57 242 207
12 46 55 243 206
13 48 62 247 202
14 48 53 240 206
15 47 56 242 207
16 51 51 248 207
17 48 64 241 205
18 49 57 246 207
19 52 62 242 206
20 51 55 238 207
21 50 58 246 208
22 57 67 239 205
23 54 69 241 207
24 56 58 240 214
25 57 68 239 206
26 59 64 232 214
27 60 65 240 208
28 63 65 237 209
29 62 63 237 210
30 61 64 234 207
31 59 66 234 212
32 67 62 232 205
33 58 71 231 208
34 66 66 228 211
35 60 72 232 213
36 69 68 230 213
37 71 71 231 207
38 65 64 229 210
39 71 69 231 208
40 68 71 228 207
41 75 67 227 213
42 71 73 226 214
43 78 68 227 208
44 77 75 217 209
45 81 75 227 211
46 79 75 224 212
47 77 72 225 214
48 75 71 224 211
49 79 77 224 213
50 85 77 225 218
51 84 79 224 212
52 78 74 217 215

*please read all question parts*

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Developments In Entrepreneurial Finance And Technology

Authors: David B. Audretsch, Maksim Belitski, Nada Rejeb, Rosa Caiazza

1st Edition

1800884338,1800884346

More Books

Students also viewed these Finance questions